In the first half of 2026, the China Textile City in Keqiao, Shaoxing, posted a transaction volume of 237.07 billion yuan, a year-on-year increase of 9.26%. Against the backdrop of shrinking domestic demand and volatile overseas markets, this growth is not accidental. Breaking down the data, Q1 transactions were 109.93 billion yuan, up 8.54% YoY, and the H1 growth rate expanded further, indicating a sustained and strengthening momentum.
Digitalization and Overseas Channels: The Two Engines
The growth is not merely driven by traditional leasing or volume expansion. The first driver is digital efficiency: the newly launched "AI Cloth 3.0" system digitizes fabric search and ordering, shortening procurement decision cycles. For buyers, the previous process of visiting markets, browsing swatches, and waiting for quotes is now a one-stop online flow. This reduces transaction friction and explains how the market achieved near-double-digit growth without a surge in foot traffic.
The second driver is the tangible expansion of overseas channels. From January to May, the market's procurement trade exports reached $2.038 billion, surging 25.72% YoY. Behind this figure are public overseas warehouses and overseas operation centers. While many domestic textile markets still rely on traditional trading companies or exhibitions, Keqiao has extended its transaction chain into target markets through pre-positioned warehousing and localized service teams. For fabric suppliers, this means shorter payment cycles and lower return risks.
Specialty Zones: From General to Focused
Notably, the market's expansion is not just about adding space. It has consciously cultivated specialized zones for outdoor functional fabrics and plush fabrics. Outdoor functional fabrics are one of the fastest-growing segments globally, driven by demand for outdoor gear. By concentrating such fabrics, Keqiao offers professional buyers a vertical sourcing center, improving procurement efficiency and enhancing the market's bargaining power in niche segments.
This shift from "generalist" to "specialist" is especially beneficial for small and medium-sized fabric enterprises. They no longer need to compete on full category coverage but can attract targeted traffic through unique craftsmanship or design within these zones.
Implications for the Supply Chain
The H1 report essentially reflects an efficiency revolution in textile circulation. For upstream weavers, order data from the digital system helps predict popular categories, allowing them to adjust loom utilization and inventory. For downstream brands and traders, overseas warehouses and AI search mean faster delivery and lower search costs.
However, it's worth noting that out of the 237.07 billion yuan total, overseas procurement trade accounts for only about $2.038 billion (approximately 14.5 billion yuan), or about 6%. This shows that the domestic market remains the core. While overseas growth is impressive, its absolute scale still has room to expand. Sustaining over 25% export growth will depend on the density of overseas warehouse coverage and localization capabilities in target markets like Southeast Asia, the Middle East, and Africa.